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tv   Charlie Rose  WHUT  May 12, 2010 9:00am-10:00am EDT

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>> rose: welcome to the broadcast. tonight we take a look at the british elections and a new british prime minister, david cameron. also, a conversation with nouriel roubini, the economist, who predicted the subprime crisis. and finally, norris church mailer. she's the widow of the great novelist norman mailer. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.
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>> rose: conservative party leader david cameron became britain's 53rd prime minister today. at age 43, david cameron will lead a coalition government with the liberal democrats led by nick clegg who will be the new deputy prime minister. speaking in front of 0 downing street just hours after former prime minister gordon brown left, david cameron first paid tribute to his predecessor. >> her majesty the queen has asked me to form a new government and i have accepted. before i talk about that new government, let me say something about the one that has just passed. compared with a decade ago, this country is more open at home and more compassionate abroad and that is something we should all be grateful for. and on behalf of the whole country, i'd like to pay tribute to the outgoing prime minister for his long record of dedicated public service. >> rose: he then spoke about the government he would form. >> in terms of the future, our
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country has a hung parliament where no party has an overall majority and we have some deep and pressing problems. a huge deficit, deep social problems, and a political system in need of reform. for those reasons, i aim to form a proper and full coalition between the conservatives and the liberal democrats. i believe that is the right way to provide this country with the strong, the stable, the good and decent government that i think we need so badly. nick clegg and i are both political leaders who want to put aside party differences and work hard for the common good and for the national interest. >> rose: the day's events were triggered when labour's negotiations with the liberal democrats failed. speaking earlier today, brown announced his resignation, ending 13 years of labour rule. >> i've informed the queen's private secretary that it's my
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intention to tender my resignation to the queen in the event that the queen accepts, i shall advise her to invite the leader of the opposition to seek to form a government. i wish the next prime minister well as he makes the important choices for the future. only those who have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good. ful i have been privileged to learn much about the very best in human nature and a fair amount, too, about its frailties, including my own. >> rose: there are questions that remain about how the coalition government-- britain's first in decades-- will govern. the two parties have significant differences about immigration, europe, and electoral reform. and the looming question remains: how will the coalition manage britain's deeply troubled economy? joining me now from washington is matt frei of bbc world news america. he's just returned from london. we talked to him at the time of the british elections. i'm pleased to have him back on this broadcast.
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welcome. >> thank you, charlie. >> rose: so tell me what we have in britain today in terms of a government. >> well, we have a coalition government, a proper and meaningful coalition government, perhaps the emphasis should be on "meaningful," between the tory party, the conservatives, the party that won the largest number of vote, 306 m.p.s but it did not get a majority in the house of parliament which is why we have a coalition with the liberal democrats, a small party headed by a man called nick clegg. now, this is as a result of five days of horse trading, wrangling, dealing, intrigue, whispers, rumors, the whole box of chicks, essentially. things really changed on an hourly basis. i had dinner last night with a friend in london who was a newly elected tory m.p., a woman from hastings and she had a meeting with david cameron and she left that meeting fully expecting david cameron, the tory leader, to go into opposition, or wrather to continue in opposition, basically the conservatives thought last night that the deal was off, that the liberal democrats with -r going
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to go with labour. then as we discovered during the day, quite the opposite was the case. so things really moved very swiftfully tend. and, charlie, when transitions happen in britain from one party to another in number 10 downing street, we're not talking about three months or headquarters being set up to talk about transition politics, we're talking about a matter of hours. the cam ropbs tonight are sleeping in the same bed-- one would assume-- in which the browns slept last night. >> rose: do we know that somehow that the lib democrats might have formed a coalition with labour? was that a real possibility? >> it was a very real possibility. i think it was a possibility that many people in the liberal democrats party favored. it was certainly something that most labour m.p.s were bigging for. now in policy terms, the lib dems-- as we call them-- and labour are much closer than the lib dems and the conservatives. also, the labour party was going to offer the lib dems something that they wanted for decades, which is electoral reform.
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some form of proportional representation which would allow them to send more members of particlement to the house of commons. now, what doesn't seem to have worked, though, for the lib dems, what the calculation must have been at the end of the day, what then persuaded nick clegg to go with the others, with the conservatives is that even if all these things had been promised, the tories were also upping their promise. and at the same time, a government with the tories is probably going to last a lot longer because a coalition with labour would have meant not just two parties but as many as six parties. a very itty-bitty almost israeli-style coalition government that could have fallen at the first hurdle. >> rose: who would have been prime minister in that government? >> well, that's a good question. gordon brown had resigned or said he was going to leave in that labour government. so you would have then ended up with an unelected prime minister. someone who was a member of parliament but someone who didn't take part in those very important televised debates. and i think that would have been really difficult for the british
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electorate to stomach. nick clegg couldn't have been prime minister because he has such a small party in the house of commons. so it would have been someone who would have essentially been foisted upon the british public without having actually taken part as a prime minister candidate in this election. i think that's something in the end which the liberal democrats were not prepared to be associated with. >> rose: so what happens to nick clegg? >> he becomes deputy prime minister. not bad,eh? >> rose: (laughs) no, it's not, you're right. >> this party has not been in party for 90 years. think of it like this, charlie. this is the party that raised the expectations during the campaign. you remember that clegg mania stuff and people were suddenly really excited. >> rose: based on one debate performance. >> well, based on one and then i have to say he kind of maintained it in the other two performances, too. but this guy had come from nowhere. remember the cover of the "economist" magazine, there was a picture of gordon brown, the devil you know, a picture of david cameron, the devil you don't know and the picture of clegg saying "who the devil?"
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so "who the devil" became this phenomenon. the "x" factor in this election campaign and then, of course, he fizzled at the polls. his party, not only did they not increase their vote, they actually lost a number of seats in the house of commons and that made things tricky. anyway, this loser ends up being the king maker, getting something that his party has dreamt of for decades and had never managed to achieve until now. >> rose: so what are the responsibilities of the deputy prime minister? >> well, a little bit of a movable tea set. it can be-- and it was under the previous incumbent, a man called john prescott-- a bit of a vice presidential job in the pre-cheney era, let's say. a lot of ribbon cutting, supermarket openings, trips abroad, nursing homes, that kind of stuff. but it can also be a lot more. i mean, this can be something... he's going to take part in the formation of policy. there will be other cabinet posts, not just him. there will be perhaps a home
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secretary, maybe one two others. they will want to form part of policy and most importantly, charlie, they will want sure promises that they will get some degree of electoral reform at the end of this process which will allow them to become a much bigger party in british politics. so in one line the landscape of britain's politics has been completely transformed as a result of coalition haggling in the last five days. >> rose: so therefore it begs the question: are we asked the question, what does it mean for the rest of the world? >> wow, what a question, charlie. well, if the rest of the world means america, barack obama has already talked to prime minister david cameron tonight. >> rose: he did indeed, yes. >> he did, indeed. he also, by the way, talked to gordon brown and wished him a good retirement of sorts. >> rose: he said "i send my best wishes to gordon brown and thank him for his friendship and distinguished services as prime minister, he provided by strong
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leadership and i have been grateful for his partnership." >> that's the statement, that's what it is. he also said, interestingly enough, is that the special relationship, that extraordinary sort of thing that we get very, very excited about in britain continues apace. this has some people surprised because barack obama has been much more pragmatic about his friends, unlike george bush who really values personal chemistry. barack obama was a bit like the form secretary of many years ago who said there's no such thing as permanent friends or enemies, only permanent interests. >> exactly. he seems to have decided david cameron will be a special friend. >> rose: but also barack obama bought into the idea of a team of rivals in which he chose hillary clinton as his secretary of state, someone who had been his rival in the primary process. >> that's a very good point. so we have a team of rivals now running the british government. remember, david cameron once said the best joke in british politics is nick clegg. not a nice thing to say about the man who is his deputy.
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like wise, nick clegg has said rude things about david cam felon a public forum, in those debates. so those two people and their parties will have to get on with each other and it's not always going to be easy. this prenup that was forged today in the heat of intrigue is something that really brings two partners together that are on many ideological issues diametrically opposed but it seemed to make sense in logical terms in terms of the longevity of the governments, in terms of the durability of this coalition. let's wait and see whether that actually survive it is hurdle -les of tough economic measures that have to be taken. all the intrigue within the tory party that's not happy to share pow we are the liberal democrats. can it survive and stick out all that that has been assigned by david cameron. >> as all of us now and as you remember from the conversation we had on friday after the election on thursday, the question is the economy and the question is the austerity that
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cameron talked about and what he has to do now. so the crucial cabinet selection was george osborne. is it a surprise? was this a place they thought they might possibly put in a lib democrat? >> well, i think there should be reef tonight that vince cable who was their senior financial figure who is much older than george osborne and a very popular man who's been holding the hand of the british public during the financial crisis. they should be relieved he's not in that job, in my personal opinion because that job is going to be really brutal. george osborne will, whether he likes it or not, become the grim reaper of the british economy. he's going to have to receive six billion pounds in cuts which is about... what is it? about $8 billion in cuts, which is quite a lot for our country. in the public sector. that's going to be brutal indeed. apportioning those cuts. to what extend tent they'll be taken in scotland, whales, or england will be a tricky question indand the will be a political backlash.
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the labour party did badly but at the gross roots level, the council level, labour did really rather well. the labour party is not finished by any means and you could see some sort of rebound of labour if these cuts are really brutal and the next few months, even. and remember one thing, charlie, nick clegg was sort of... you know, it was a bit like hamlet meets pry pry. on the ham... "the price is right. requests it was the coalition of the defeated, that would have been with labour, and the coalition of the top, that's a former westminster boy-- that was my old school-- in alliance by a former e tonian. there will be three former etonians in this government. that's a lot coming from one school. and i think if you're in scotland or whales and you see that your public sector has been slashed by this government, you're going to look at that alliance of the top south of the boarder in england and wonder do they represent me?
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>> rose: i have to let you go because off broadcast to do but we'll revisit this subject as britain answers the question who governs britain. it's david cameron and his deputy prime minister nick clegg. thank you very much, matt. >> a pleasure, charlie. >> rose: we'll be right back. stay with us. >> rose: nouriel roubini is here, he's a founder and chairman of r.g.e. monitor, an economic and financial consulting firm. in september, 2006, he predicted that a deep global recession was imminent. his foresight quickly earned him the nickname "dr. doom" by some in the financial community. his new book "crisis economics considers the future of finance and in some ways looks back at previous crisis to see what the lessons are. i'm pleased to have him here back at this table. welcome. >> pleasure being with you again >> rose: let's start beyond
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the book, looking forward, how do you see this economic recovery today? >> i see the bumpy especially advanced economies. things are not great in europe, in japan, even in the united states. this crisis was caused by excessive amount of debt and leverage of the private sector but now we've socialized many of these private losses and there is a huge amount of budget deficits and public debt. not just in europe, also in japan and the united states and the u.k. and the second stage of this global financial crisis like i put out in my new book is that when you transfer the private liabilities on the back of the government, then the buildup of public debt either leads to default by governments who cannot pay or if you can print money and monetize this budget deficit, you get inflation. >> so there's no good choice. >> it's going to be very hard. on one side we need the fiscal stimulus because a year two ago
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private demand was collapsing. so if we did not do the kepbsian stimulus, it would be in another recession, becoming a depression. on the other side, it was never freelance. running a trillion dollar budget deficit every year the united states means eventually raise taxes or cut spending and slow the growth. if we don't do it, the only other options are either default or monetization and inflation. so it's going to be difficult for many of these advanced economies. >> rose: like i said, no easy choice. >> absolutely. you're right. >> rose: (laughs) here's what's interesting to me. you believe... in fact, you were prepared to see the government go further than the bailout in terms of the use of public funds in order to deal with severe crisis, correct? >> yes, i was in favor of some of the short-term measures, the monetary easing the, fiscal easing, even some of the backstops of the financial system. but i think we did too much by
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bailing out, for example, bear stearns or a.i.g. we put on the balance sheet of the government these private liabilities. we did the same thing with fannie and freddie. so this buildup of public debt is something i worry about. >> rose: will bear stearns cost the government any money in the end? >> oh, it looks like it did. >> rose: because it guaranteed debt. >> essentially the government took over about $40 billion of these toxic assets of bear stearns, put them in these two special purposes and now the value of these assets is much lower than the face value of it. >> rose: what happened to the toxic assets? >> well, some of them have been written down but if you look about it, the policy response has been extend and pretend, pray and delay. many of these banks are still carrying, many of these assets and the loans at face value of a hundred cents on the dollar on their books. for example, we have two trillion dollars of commercial real estate loans and securities and there's been these regulatory forbearances, which
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are just a way of saying that the regulators were given 40% in commercial real estate prices, probably the stuff is mostly underwater. so we're not recognizing many of the losses, we did on some but not everything. >> rose: how long it will be underwater? >> well, i think for a long time. prices for home have fallen from the peak 30%. prices from commercial real estate have fallen by 40%. they may be stabilizing but there's not going to be any time soon when prices are going to go up 30%, 40% to the previous level. therefore many of these bad assets that are underwater with negative equity, meaning the value of the assets is lower than the value of the mortgage or the debt on it, they're going to stay underwater for a while and people will default. they're doing it increasingly. if you have lost your job, if you have low income, if you're unemployed, if you have other bills to pay, many people are
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walking away from their homes. people refer to it as jingle mail. you put the keys in a envelope, send it back to your banker. >> rose: you give the keys to your home. >> especially in the united states, mortgage non-recourse loans. if you walk away from your home when the value of your home is below the value of your mortgage they can not go after you to recoup the difference between the two. >> rose: the bailout of a.i.g., was it the right thing to do? take that one specifically. >> specifically i think that was a mistake because many of the financial institutions were holding these toxic securities and have been guaranteed by a.i.g. i know it for a fact. they were willing to take a hair cut of 10%, 20%. >> rose: the banks were? >> the banks and they were surprised because one day after the bailout of a.i.g., the fed literally came and said we're going to buy back the securities from you and 100 cents on the dollar so you're not going to have any hair cut so we undo the guarantee that was given. so we spend something like $100
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billion to buy at face value stuff that was 70 or 80 cents on the dollar when many of these financial institutions tried to write off... >> rose: so goldman sachs and the european banks prepared to take a hair cut, prepared to take a reduced price on the dollar. goldman sachs and german banks, european banks. >> they would have accepted it. >> rose: how do you know? to do they say that? >> well, they have a source of a person that was senior on a major european bank in new york and he said "we thought this stuff was worth 70 centsen the dollar and when the fed came and bought $8 billion of our own assets, one hundred cents on the dollar, we were shocked." >> rose: why didn't the government negotiate that? why didn't they say "we're prepared to give you 50 centsen the dollar." >> that's my solution. i think on one side the government was fearing that in this financial turmoil after lehman having additional losses
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is going to lead to more financial contagion. but i think they played their cards very well. they could have accepted a hair cut, they would have done it but the government said the legal issues we don't know how to do it. >> rose: what's the lessons we learned from the continual series of economic crisis within capitalism? >> it's a number of implications. the first lesson is that crisis are not the black swan events, using the terminology of my friend aseem talib. they're not just random outcomes, they are the result of a buildup of market, financial and policy vulnerability mistakes, excessive risk taking, excess i have asset bubble, rev reg debt and so on. so they are predictable so the first chapter of my book is called "the white swan "as opposed to "black swan" because they are predictable. even if the paradoxes are predictable, but generation after generation, we seem to forget the past, right?
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because when there's a bubble, everybody is in euphoria. irrational exuberance. consumers can borrow against their homes. governments and policymakers are happy because they got reelected. wall street makes billions of dollars of profits. so when you live in a bubble, everybody's delusional, you believe that things things thatt continue like asset prices rising or home prices increasing by 20% per year can go on forever. so people lose track of reality. >> rose: so where's the next bubble that you see on the horizon? asset bubble? >> i see it in the fact that today interest rates in all of the advanced economies are near zero. the fed is near zero interest rates, u.k., europe, japan, everybody can borrow at zero rates and because of that, now these back to business as usual on wall street. most of these financial institutions are making huge amounts of profits to prop trading, borrow at zero rates and make an investment. it was just announced today that in the first quarter of this year, goldman sachs did not have a single day in which they lost
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money. >> rose: on trading? >> on trading. >> rose: not one time did they lose none? every trade made money. >> yes, yes. and they are doing a lot of it, more than before. >> rose: so business is back to usual because the cost of money is so cheap. >> yes. i worry that zero interest rates are leading now to an asset bubble globe *b globally. it's leading to high oil energy commodity prices, it leads to credit to be cheap, it leads to stock prices being cheap, emerging market assets to be cheap. it's the beginning of a bubble. i don't think it's going to burst for the time being but give it two or three years. >> rose: so not specific like housing or technology. >> no, at this point i think it's generalized. with zero interest rates, effectively you can borrow at zero rates and invest in any risky asset and the value of most risky assets for the last year has gone up by 50%, 60%, 70%, 80%. so i see it being across the board throughout the wide range of risky assets both in the u.s. and other countries. >> rose: other than raising the interest rate and creating
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some pressure on the cost of money, what else should the government do today? >> in my view, in addition to tighter... >> rose: the federal reserve in the case of interest rates. >> you need also tighter overall supervision of the financial institution that prevent this is credit bubble from occurring. >> rose: okay, what kind of regulation do you favor in terms of that which is on the board at the senate committee today? >> in my view... >> rose: the dodd bill. >> what's being done by the dodd bill is not enough. first of all, if institutions are too big to fail-- and they're becoming even bigger to fail-- j.p. morgan took over wamu and, you know, bear stearns. >> rose: bank of america. >> and countrywide to wachovia. so they were already to too big to fail. now they're even too bigger to fail. so if they're too big to fail, they're too big. we should break them up. they're also becoming increasingly too big to be saved or too big to be bailed out. that's what's happening in europe. and they're also becoming too
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complex and too large to manage. there's no way in which a c.e.o. of a bank can monitor the activities, the risk taking of thousands of different traders and bankers. each one of them is a separate risk-taking p.n.l . and there's no way you can do it. so financial institutions do commercial banking, investment banking, hedge fund activity. prop trading, underwriting, insurance, asset management. it's becoming too complex to manage. these financial supermarkets have seen a number of these larger banks. >> rose: but that's part of what the volcker rules are about. >> the volcker rules goes in the right direction. i would say if you're a bank holding company you can o not do prop trading. you can not is have private equity or hedge funds training but i would go back to the restriction wes had under glass-steagall when there was a full separation within commercial banks and investment banks and these banks could not do a wide range of other risky activities. >> rose: primarily they were doing investment banking primarily. mergers and acquisitions and raising money for companies that wanted to go public.
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>> yes, yes. >> rose: and then they morphed into other things. >> hedge funds, private equity and lots of risky leverage investments. >> rose: on the face of it, is anything wrong with hedge funds? >> no, there's nothing wrong with hedge funds. they have a role to play and it's okay. but, you know, take an institution like goldman sachs. in many ways it looks like a hedge fund, right, is mostly involved in prop trading, more ledgely than any hedge funds. it can borrow from the government at zero rate so if goldman sachs wants to be a hedge fund, be a hedge fund but don't have a guarantee of the deposit of the taxpayers on your liability. we have large institutions three that pretend to be investment banks or commercial banks but behave like hedge funds and they're playing... >> rose: and great percentage of the revenue comes from prix pro-e pry tear trading. >> definitely. and not only prop trading but through market maiding and leading activities. there are also conflicts of
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interest. we don't know what goldman sachs did was technically illegal, that's going to be decided in the court but from a substantial point of view each one of these large institutions is doing 20 types of financial services, it's a major conflict of interest because it's part of chinese walls that are always on both sides of every deal. that's the problem. >> rose: it's a very interesting question and as you know lloyd plank fine sat here and he said... blankfein. he said what we are is a market maker. we're not betting against our clients and we're making markets and making markets has a societal value. what's wrong with that argument? >> that's wrong in the following sense. if you have markets based on exchanges-- like, for example, for the stock market-- you know what the price of a security is. in the typical market making and dealingive activities of broker dealers like goldman and others, there's no trice transparency. you could have for the same security ten different prices. you could have different types
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of fees. so these are totally non-transparent markets. i would take all these markets where the broker dealers are market makers and dealers and put them all on the exchange. they'll be price transparency, the fees will be lower and therefore it will be much more competition. it will be a system in which a smaller number now of institutions have an ole on market makings. those things should be on exchanges. transparency. there was no transparency. new exhaustive complex mark to market with zero transparency. that's what's part of the problem. >> rose: is there society a value for somebody who makes markets. is there a societal value for people, for example, for all those endowments and others who invested in hedge funds and got a very significant return and when everything came down they found tha gone down. but was their societal value because those people do good
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things with the money they're making? >> rose: there is in the sense that there is nothing wrong with trying to maximize your return on your investment for safers, save money and then need that money for retirement or over otherwise. the point is a lot of financial innovation has nothing to do with making the benefits of safers. instead of being alpha, it's what i call shmalfa, they're separating savers on a return on their investment. so that's the part that has to be essentially reduce. ed through more efficiency and competition. >> rose: are you on balance optimistic or pessimist snick. >> i try to say that i'm... >> rose: are you dr. doom? >> i'm not dr. doom. i try to be dr. realistic and the global economy is improving and recovering so i'm not... i see many vulnerabilities. >> rose: what's going to
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happen to greece? >> i feel in spite of o this huge bailout program the stock of public stket so large 10% of g.d.p. is going to be unfeasible. you have people dieing in the street, you have strikes. i think eventually greece will default or restructure its public debt and greece might have to exit the european market. >> rose: if it does that, what does that do to the eurozone? it means that... go ahead. >> if there is con the age on, the risk is that after greece people are going to say who's going to be next? is it going to be spain, portugal? so on. so that's one of the reason. one country going to lead them to contagion. has it happened during the past week when there was panic and a regional contagion. but there are other ways as opposed to disorderly ways in which you can restructure bet. if you do it disorderly, it's going to be damaging. but if you structure
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liabilities, that puts forward the maturities and reduces the interest on that debt. it can be done in an orderly way under threat of default in an orderly way. >> rose: the biggest challenge for america's dealing with its debt? >> is i going to be a political challenge. we know what needs to be done. the compromise will be that we have to control spending on one side and raising revenue on the other side. right now there's a massive amount of political gridlock in washington. the two parties are completely divided. there is no bipolarship and therefore on one side the democrats are against spending cuts, especially on entitlements. on the other side, the republicans are against tax increases. and the kind of republicans today in congress are very different from those of 20 years ago. george bush's father was willing to lose the election and reverse his "read my lips "commitment of no new taxes for the sake of the country. but the new type of republicans are closer to the tea party that
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are ideologically against any increase in revenue. so if the democrats are going to veto spending cuts and the republican will veto tax increases, the deficit is going to remain large, a trillion dollar more and then the path of least resistance is going to be to monetize this deficit by running the printing presses the way the fed has done. and that means a fiscal train wreck and/or inflation. it's a political problem. in the u.s. but mostly around the world. today in germany angela merkel lost the election and she's not going to have majority in her own parliament in the u.k. >> rose: because of what she did with respect to greece. >> absolutely. in the u.k. you have a hung parliament. so throughout japan and the u.s. we have gridlock and inability politically to do the right thing. that's the biggest risk. >> rose: obviously you have to secretary of defense now recommending cuts. in the department budget saying that there's a significant amount of cuts and he started a study to find out where they
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are. that's making cuts in a significant part of the american budget. it doesn't even do with entitlements, though. and there's no political will to do anything with entitlements yet, correct? >> no, there's not. i think part of the resistance is that eventually on social security we know what needs to be done. we need to increase the retirement age. we need to increase the payroll taxes and we need to reduce the benefits for retirees. but how can you do that politically when we're back to business as usual on wall street and it's becoming outrageous. that's why there's a political backlash that says why should the working class do the sacrifices when wall street is back to the same kind of... >> rose: was compensation the problem on wall street or leverage and risk? >> well, the two are related because if you are compensated with a bonus that says maximize your short-term risk, take a lot of rev reg. you have profits and bonuses and if your bank goes bankrupt, there's no loss to you.
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so you have claw back if your investment is risky then that's part of the problem. the compensation is related to the risk taking and the rev reg. >> rose: goldman sachs used to say, may still say that they were long term greedy, that was their basic business philosophy. >> well, you know, many i view of it is that the current banker or tradier at goldman or otherwise is not greedy or arrogant than, say, the gordon gecko with the character of 20 years ago. >> rose: the emphasis suspect on long-term greedy. they say they're not short term, they're long term. >> rose: >> they're both short term and long term greedy. there's always greed pho *pg bankers, today like there was 20 years ago with a similar of compensation that has led people to become more greedy, take more risk and more leverage on the institutions they work for. >> rose: speaking of gordon gecko, there's a new movie called "wall street two" and you're in the movie. >> yes, i have a small cameo role.
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i play myself. dr. doom. after the collapse of lehman being interviewed about the risk of a global financial meltdown. >> rose: you love your life now? >> i enjoy what i do very much. i must say i spent three quarters of my time on airplanes traveling around the world. i feel like this character of the movie "up in the air" living in hotels and places that are far away and being always in kind of lounges and airports. >> rose: you were born whether where? >> i was born in istanbul. >> rose: and iranian jew, right? >> yes, went from istanbul to tehran, tel aviv and then milan. >> rose: then yale and harvard. >> yes. >> rose: got a doctorate at harvard? >> and then taught at yale and n.y.u . >> rose: and came down to n.y.u . (laughs) you say about your social role in america it just shows you that people are in love with a brain rather than a body, doesn't it? >> i think that they're fascinating times and what's happened the global economy has made economists look cool for
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once. >> rose: what's the advice that companies come to you for? >> first of all, the clients of my consulting firms include both private sector institutions, but also many governments banks, finance ministries, sovereign wealth funds. so i think there's a huge amount of demand today for independence economics, research. a lot of the research on wall street is called self-research. it's related to essentially peddling securities and therefore in spite of the chinese wall is not independent. i think there's really demand for people who can independently think about issues and speak their minds without any conflict of interest. we don't manage any form of money for anyone, we're just in pure research. i think that intellectually 20 years in academia, everything is to try to be right and honest and objective as much as i can. >> rose: you said you realized you were american when you began to dream in english. >> that's correct. i think you become a member of
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the country when you start dreaming in that language. it used to be italian and i switched to english about 15 years ago. >> rose: "crisis economics. a crash course in the future of finance." some of what you have been hearing this evening. we will come back to nouriel roubini and talk about these ideas in the near future. thank you very much. >> great being with you. >> rose: back in a moment. stay with us. >> rose: doris church mailer is here. for 27 years she was married to one of this country's great writers, norman mailer. when she first met him at a party in arkansas she was a high school art teacher named barbara jean david. she wanted her book signed. a relationship ensued and she followed him to new york city for the rest of his life. negotiation a career in acting and modeling and painting she's also a writer, she recently published her third book, a memoir titled "a ticket to the circus." i'm pleased to have my friend norris church mailer toe this program. welcome. >> thank you, charlie. >> rose: when you first met
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him what did you think? >> well, when i first saw him i was expecting this old guy because i knew he was as old as my father, anyway, since he'd been in the war and i had walked into this party which i finagled to invite myself to because it was for the english faculty of the college and i was teaching at the high school. i wanted to get my book signed because i had aspirations to be a writer. i subscraped the new yorker and i thought i was an intellectual in russellville, arkansas. i was allowed to come to the party and walked to the door and i was wearing blue jeans and i thought i'm not going to change clothes for this. i'll be very casual. and everybody was dressed hundred their suits ands the and english faculty clothes and i walk in and he's wearing blue jeans, too. and the sunlight is coming behind him and he's kind of got this graying hair that's like a
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dandelion puff and i thought he doesn't look that old. he doesn't look old at all. he was really cute. >> rose: then what happened? >> he got up and walked other and looked up at me because i'm 5 '10 bare feet and i had big tall wedge shoes as was the style in 1975 and he shook hands and introduced himself and turned on his heel and walked out of the room. i thought well i guess he doesn't like tall women. i won't get my book, i'll just stay a minute and leave. and frances, the guy giving the party, the friend who was in the war with came up and said "stay after the party and go out to din we are us." i said "francis, i don't think that's a good idea. i don't think mr. mailer liked me very much." he said "liked you? he's the one inviting you, i'm not inviting you." >> rose: (laughs). >> so he had his friend come.
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>> rose: so the title of the book is called "a ticket to the circus." so the life that came after that when you moved to the new york was a circus. >> it was a circus, yeah. >> and when you decided to write about this, did you have any reservations? >> i never thought i would write about this. in fact, at the beginning of the book, there's an introduction chapter where i would say about me when you write about me, say blah blah blah, whatever it was at the time he wanted me to say. and i kept say i'm never going to write about you. nobody would believe it. and i didn't think i would. i thought my life is too personal. too bizarre, crazy, i don't want to do it. after he was gone i just... it's like the... the scenes would just roll across my head like scenes from a movie and i just felt like i wanted to write it, i wanted to sort it out, i wanted to sort in the some kind of order for myself or my kids
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and it just rolled out. >> rose: did you go back and read letters and look at these interviews that he did or did you let what was in sight of you come down. >> i didn't do a lot of research. if i needed to look up a date or try to find something, i would. but, no, i didn't go back and look at clippings or letters, except for the letters that are printed which is another whole story. it just came out. >> rose: so you come to new york? >> i come to new york. >> what did you think was going to be like with no -r man mailer? >> i had no idea. i didn't even know that i was going to be with him when i first came here. because we had just met so recentliment we met in... well, i think we met in april, he think wes net march. we used to differ on that. in june he invited know a visit and that's when he said why don't you come up and stay and do whatever, be a teacher, be a
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model, be something. because people had been stopping me on the street and saying "are you a model?" and i was like, well, that might be something interesting to do. but it was august by the time i finally moved up. he was living with someone, he was half separated, not in a happy relationship and he was married to one woman, living with another woman and had several serious girlfriends on the side so i come skpwhrao the middle of this mess and frankly i didn't know what was going to happen and i wasn't worried about it. i was young, i could do something. i could make my own way, i was making my own way as it was. >> rose: this book is about what it's like to live with norman mailer. >> part of it. >> rose: what's it like to live with norman mailer? >> what's it like to live with norman mailer? >> i don't think it's like anything else that i ever did. he was surprise tkpwhreug easy to live with. he was professional, i learned my professional habits from him. he wrote everyday of the week,
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seven days of the week. whether he felt like it or not he would write or read or something. we got along well for the most part in spite of the fact that we fought a lot. we sparred. i wouldn't call it fighting but, you know, the back and forth, the reparte. >> rose: what are the misconceptions about norman? >> i guess the biggest one is, you know, what a misogynist he was. he didn't help himself with some of the things he said. he would make these outrageous statements i think if part just to get reactions from people like women should be kept in cages, ha ha. >> rose: you you knew he didn't mean that. >> no, he was making a big joke of it. i'm a feminist and i told name that from the beginning. i bought a house and i had to get a man to put his name on it even though i had good credit, i had a good job because i was a woman. my father had to cosign the note. so he was very women's rights.
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>> rose: he loved women, too. >> he loved women. >> rose: in every way. >> people say he hated women, i don't know what they're talking about. most people who say that don't know him, they haven't read his work, they don't know anything about him. he didn't hate women. >> all the affairs that he had. >> yeah, there were some. >> rose: now, what's amazing about that is not that he had affairs but that moment he confessed. >> the moment? you mean the several... >> rose: i know, but tell me about the time he confessed to you and started telling you this ... and you finally got angry. >> well, it started. i don't know how far you want to get into this but i didn't know for many years that he was having affairs. >> rose: when did you find out? >> i found out in 1991. when we got together he made it very clear he wanted to be in a monogamous relationship with me. that he was tired of cheating and lying and sneaking around and he was tired of being guilty and he wanted to be... to see how deep he could go into a
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relationship with a woman and he wanted it to be me. i think for many years he was true to me and that maybe lulled me into some kind of neverland place where i didn't think he was ever going to do it but when he did start doing it, i didn't know it and i think it went on for maybe eight years or something before i found out. when i did find out, he arranged for me to find out in kind of a blatant way. i think he was tired of it. he wanted to stop it. he wanted it to end but i had to find out. so here's this idiot wife who's not picking up on the clues so he started leaving these big clues around and i finally was smart enough to pick up on it. >> rose: why couldn't he come and tell you? >> it wasn't his style. he couldn't sit down and say "by the way, i've been cheating on you for eight years." >> rose: but he told you in one of those exchanges this one and that one and that one and you wanted him to stop. >> and once he got started it was just like... he kept vomiting up all these stories and there was more and more and
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more. and how many of these women and who and what and she's older than you are. i mean, you know, and a lot of them were older than him. a lot of them were... you know, people i would never think about him having an affair with. >> rose: what did he think of his writing? >> he thought he was a really good writer. he was afraid he wasn't the best writer there was so he was constantly measuring himself... >> rose: against whom? >> against... i don't know. this group of writers he considered in the same league and there was a list of them. it was updike and bellow and a list of contemporary writers of his. >> rose: here's what he said to me about writing and his wanting to write the great american novel. >> when you look back at 0, norman mailer's life has been in pursuit of what? >> oh, a great novel that's the one question i can always answer. i always wanted to write a great novel. >> rose: and you have. >> well, not my idea of a great novel. i've written very good novels, i think. >> rose: but what's the
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difference? >> the difference is a great novel changes people's lives in ways they can't measure. one of the things i mentioned in passing in this book is who was not bored at one point or another in reading... and then i list all the great novels. "moby dick", "the magic mountain" i go through all of them. >> rose: and you're saying what? >> we've all been bored in part by every one of those books because they are saying new things that are disturbing so there's a ten den city to turn off as you read. a book that's a fast read, an absolutely agreeable fast read usually a mare treurbs book. i've done my best. >> rose: have you? >> yes, with all the vices everyone has in their character. when you do your best, it doesn't mean that you are doing your best every damn day, hell know, oh, no, no. you are just doing your best given your liabilities and your limitations. >> rose: see, that's what makes him interesting right there. he could talk about anything in the most engaging way. >> he could.
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>> rose: he could find so many aspects. of the subject. >> and he found these truths. like maybe we are bored because we're reading a profound truth and we can't grasp it so we glaze over it and then we have to go back and read it two or three times. >> rose: he wrote a lot of letters to you. >> >> he wrote letters to me. >> rose: which ones do you treasure the most? >> well, i love... the love letters, obviously. i put some of them in the book. which some people are very upset about. >> rose: why? >> i really don't know. they're beautiful love letters. i mean i could see myself this little old lady burning her love letters in the fire and didn't have anybody to read them. they were just... to me they were just beautiful languages like having a picasso in your closet. i didn't want to just shut in the the closet, i wanted it to be out there. it was a period in our lives when we were first getting to know each other and he was talking about the monogamy and about plans and, you know, i
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just thought it was... it was good to hear his own voice. >> rose: he didn't want to talk much about the time, the violence against one of his wives. >> no, no, that was horrible. >> rose: probably the worst thing ever for him. >> the worst thing that ever happened to him. or happened... the worst thing that ever happened. he we didn't talk about it a lot. >> rose: ever talk about it? >> of course we talked about it. to me it was almost like it happened to somebody else. i couldn't reconcile this man i knew with someone who would do something like that. it was something i couldn't understand and i don't know that he ever understood it. >> rose: it didn't gnaw at him? >> it did. it's not like he was obsessed everyday. it was part of his history and he had to live with it everyday but it was not something we
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talked about. >> rose: do you think fame so early changed him? the fact he was so young? >> absolutely. he often said he was too young when he got famous. he was thrust into the public eye without having any experience and that was bad. >> rose: he was famous all his life and always in the public eye eye. you have as part of the memory this whole bank of who norman mailer was. everything. the movies he made. the books he wrote. the interviews he did. he was a wonderful guest on television because he gave. >> he was the best speaker. i never saw anybody like him. >> he was amazing. even at the end of his life when he was very ill, he did a show with gunther grass and before he went on the show we thought
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maybe we should take them to the hospital and he gets out on stage and suddenly it's like somebody's winding the key and he's... he's there. his it's like he was like that. his eyes brightened up and he started saying this stuff and you have to was coming out that i would never imagined he could think up in the shape he was in. >> rose: here is what he said to me about old age and the advantages of old age in a 2003 interview. 80. >> 80, yeah. >> rose: what's it like? >> oh, ask me when i'm 90. >> rose: (laughs). >> i don't know. old age is odd. it has its advantages. you kind of settle down in one funny way, which is you don't get angry as many things in a given day and you don't feel as much of a sense of frustration of the things you haven't become. >> rose: tell me about that. i've read your thoughts on that. this idea of saying i know what
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i'm not going to be and i'm okay with what i am. >> well, you're never okay with what you are but generally speaking you come to accept the fact that you probably are what you are. in other words, you're not thinking... i don't think any longer maybe i ought to go back to politics, maybe i should have been this. why could i never become the skier i wanted to be. i don't think about those things anymore. all i think about is the one thing i was really good at, that's writing. >> rose: so then the question often comes, because of all the extramarital affairs and that, why did norris, a stunningly beautiful woman from arkansas, stay with him? and the answer is? >> well... >> rose: the circus new. >> i mean, what would i have done? i would have been off somewhere else wondering what he was up to and wishing i was there. you don't just leave a man, you leave a whole set of... you leave a life. you leave a history. you leave all these... the way i talk about it is like all the experiences you have together
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are threads that make these cords that bind you together and you can't just take a knife and cut all these cords and just say "i'm leaving because you cheated on me." >> rose: the last years. difficult? >> oh, yeah. yeah. we... i came down with cancer in 2000, i had my first surgery. he had hip surgeries, he had heart surgeries. i had seven or eight surgeries. it was hard. my father passed away. my mother moved up. more surgeries, more doctors. it's just... you know, we... it was a hard ten years, the last ten. but we... you know, there's some good times in there, too. we got through it. >> rose: and how did he face brs
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not a whiner, he didn't carry on about how bad off i am and how horrible this has happened to me, how could this happen to me? he didn't do any of that. he just accepted it as this is part of life. >> rose: he had a respirator for... >> he did. yeah, that was hard. >> rose: he couldn't speak. >> no, he couldn't speak or communicate. he couldn't really write. he'd try to write and we couldn't read anything. it was so frustrating for him because, as i said, we started this conversation when we first met and then we couldn't talk anymore. we had to make the decision, the whole family got together, are we going to turn the respirator off, how long are bewe going to let this go on. and we had made the decision to
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w the doctors to turn it off the following morning. and everyone was there except his son steven whose who was in a play and steven flew in late that night and came to the hospital after we had all gone home and was sleeping on a little cot in his room and i guess it was about 3:00 in the morning, 4:00 in the morning the bells and whistles started going off on the machinery and steven woke up and turned to look and norman sat up in bed and he said his eyes opened and he had this look on his face like he was seeing something wonderful. and he smiled, this big beatific smile and just... he was gone. i was happy steve was there with him. >> rose: lot of memories. >> oh, yeah. lot. >> rose: the book is called "a ticket to the circus." norris church mailer. it's about her life, it's about arkansas, it's about growing up, it's about a relationship. "a ticket to the circus." thank you.
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>> thanks, charlie. captioning sponsored by rose communications captioned by media access group at wgbh
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